Kerala High Court
Trichur Urban Co-Operative Bank ... vs Assistant Registrar(General) Of ... on 17 January, 2023
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
TUESDAY, THE 17TH DAY OF JANUARY 2023 / 27TH POUSHA, 1944
WP(C) NO. 27554 OF 2022
PETITIONER:
1 TRICHUR URBAN CO-OPERATIVE BANK LIMITED ,NO.87 REPRESENTED
BY MR. JOY K.K. ASSISTANT GENERAL MANAGER
AGED 57 YEARS
HEAD OFFICE AT MISSION QUARTERS
THRISSUR, PIN - 680001
BY ADV DEVAPRASANTH.P.J.
RESPONDENTS:
1 ASSISTANT REGISTRAR(GENERAL) OF CO-OPERATIVE SOCIETIES
SAHAKARANA BHAVAN OFFICE
THRISSUR, PIN - 680003
2 REGISTRAR OF CO-OPERATIVE SOCIETIES,
THE OFFICE OF REGISTRAR OF CO-OPERATIVE SOCIETIES,
JAWAHARSAHAKARANABHAVAN, DPI JUNCTION, THYCAUD,
THIRUVANANTHAPURAM, PIN - 695014
3 STATE OF KERALA
REPRESENTED BY SECRETARY TO THE DEPARTMENT OF CO-OPERATION,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM , PIN - 695001
4 UNION OF INDIA
REPRESENTED BY SECRETARY TO THE DEPARTMENT OF FINANCE
GOVERNMENT SECRETARIAT, NEW DELHI, PIN - 110001
ADV. K B SONY, GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
17.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WPC No.27554 of 2022
2
JUDGMENT
Dated this the 17th day of January, 2023
The petitioner has approached this Court
challenging Ext.P3 order of the Assistant Registrar
(General), Thrissur, through which arbitration
proceedings initiated by the petitioner against one
Hari, has been rejected on the ground that the
remedy of the petitioner lies in approaching the Debts
Recovery Tribunal under the provisions of the
Recovery of Debts and Bankruptcy Act, 1993.
2. The learned Counsel appearing for the
petitioner submits that to recover the amount due
from the aforesaid person, certain property of the
borrower had been brought to sale under the
provisions of the SARFAESI Act, 2002. It is submitted
that the amount received by the bank out of the sale
was insufficient to clear the liabilities of the borrower
in full and to recover a balance of Rs.1,80,676/-
WPC No.27554 of 2022
together with future interest and costs, proceedings
have been initiated under Section 69 of the Kerala
Co-operative Societies Act, 1969. It is submitted that
Ext.P3 order was issued without even affording to the
petitioner an opportunity of being heard. It is
submitted that proceedings under Recovery of Debts
and Bankruptcy Act, 1993, can be instituted only in
respect of a liability which is in excess of
Rs.20,00,000/- and therefore, the petitioner could not
have approached the Tribunal in the matter. It is
submitted that the dispute between the petitioner and
the borrower squarely falls within the jurisdiction of
the authorities under Section 69 of the Kerala Co-
operative Societies Act, 1969, and therefore Ext.P3
order is liable to be set aside.
3. Heard the learned Government Pleader also.
4. Having considered the submissions made by
the learned Counsel for the petitioner and the learned
Government Pleader and having regard to the
WPC No.27554 of 2022
provisions of Section 69 of the Kerala Co-operative
Societies Act, 1969, I am of the view that Ext.P3
order is not sustainable in law and it is liable to be set
aside. Section 69 of the Kerala Co-operative Societies
Act, reads as follows;
69.Disputes to be decided by Co-operative
Arbitration Court and Registrar.-
(1) Notwithstanding anything contained in
any law for the time being in force, if a dispute
arises,-
(a) among members, past members
and persons claiming through members,
past members and deceased members; or
(b) between a member, past member
or person claiming through a member, a
past member or deceased member and the
society, its committee or any officer, agent
or employee of the society; or
(c) between the society or its
committee and any past committee any
officer, agent or employee or any past
officer, past agent or past employee or the
nominee, heirs or legal representatives of
any deceased officer, deceased agent or
deceased employee of the society; or
(d) between the society and any other
WPC No.27554 of 2022
society; or
(e) between a society and the
members of a society affiliated to it ; or
(f) between the society and a person,
other than a member of the society, who
has been granted a loan by the society or
with whom the society has or had business
transactions or any person claiming
through such a person; or
(g) between the society and a surety
of a member, past member, deceased
member or employee or a person, other
than a member, who has been granted a
loan by the society, whether such a surety
is or is not a member of the society; or
(h) between the society and a creditor
of the society, such dispute shall be
referred to the Co-operative Arbitration
Court constituted under section 70A in the
case of non- monetary disputes and to the
Registrar, in the case of monetary
disputes; and the Arbitration Court or the
Registrar, as the case may be, shall decide
such dispute and no other court or other
authority shall have jurisdiction to
entertain any suit or other proceedings in
respect of such dispute.
WPC No.27554 of 2022
(2) For the purposes of sub-section (1), the
following shall also be deemed to be disputes,
namely:-
(a) a claim by the society for any debt
or demand due to it from a member or the
nominee, heirs or legal representatives of
a deceased member, whether such debt or
demand be admitted or not;
(b) a claim by a surety against the
principal debtor, where the society has
recovered from the surety any amount in
respect of any debt or demand due to it
from the principal debtor, as a result of
the default of the principal debtor,
whether such debt or demand is admitted
or not;
(c) any dispute arising in connection
with the election of the Board of
management or any officer of the society;
Explanation:- A dispute arising at
any stage of an election commencing from
the convening of the general body
meeting for the election, shall be deemed
to be a dispute arising in connection with
the election.
(d) any dispute arising in connection
with employment of officers and servants
of the different classes of societies
WPC No.27554 of 2022
specified in sub-section (1) of section 80,
including their promotion and inter se
seniority.
(3) No dispute arising in connection with the
election of the Board of Management or an
officer of the society shall be entertained by the
Cooperative Arbitration Court unless it is referred
to it within one months from the date of the
election.
All monetary disputes mentioned in
Schedule III to the Act shall be filed within the
time limit specified in the said Schedule.]
The provisions of the Recovery of Debts and
Bankruptcy Act, 1993, can be invoked by the
petitioner only in respect of debts of Rs.20 lakhs and
above. The amount which is sought to be recovered
under the provisions of Section 69 of the Kerala Co-
operative Societies Act, is a sum of Rs.1,80,676/-
together with interest and costs. This is not a matter
in respect of which the petitioner could have
approached the Tribunal by filing an Original
Application under the Recovery of Debts and
Bankruptcy Act. Moreover, Ext.P3 order has been
WPC No.27554 of 2022
issued without affording an opportunity of hearing to
the petitioner. For all these reasons, Ext.P3 is
quashed. The arbitration proceedings initiated by the
petitioner shall stand restored to the files of the 1 st
respondent. The 1st respondent shall decide the claim
petition in accordance with law and on merits and
after affording to the petitioner and the borrower an
opportunity of being heard.
The writ petition is allowed in the manner
indicated above.
Sd/-
GOPINATH P.
JUDGE
SKP/17-01
WPC No.27554 of 2022
APPENDIX OF WP(C) 27554/2022
PETITIONER'S EXHIBITS:
EXHIBIT P1 COPY OF THE PETITION FILED BY THE BANK ON
17.01.2021UNDER SECTION 69 OF THE KERALA CO-
OPERATIVE ACT
EXHIBIT P2 COPY OF THE CIRCULAR ISSUED BY THE SECOND
RESPONDENT BEARING NO 50/2003 DATED 29.08.2003
EXHIBIT P3 COPY OF THE ORDER OF THE FIRST RESPONDENT
BEARING NO AR III/ARC 270/2022 DATED 22.04.2022
RESPONDENTS' EXHIBITS:NIL
TRUE COPY
P.A.TO JUDGE
